LONDON: Dramatic challenges, and mediocre responses: that is the history of the European Union. All too rarely does the EU rise to the level of events, which is why Europe is fading economically and geopolitically. The 1958 Treaty of Rome, which established the European Economic Community, was Europe’s great leap forward. But the decision to …

LONDON: Two alternative approaches dominate current discussions about banking reform: break-up and regulation. The debate goes back to the early days of US President Franklin D. Roosevelt’s “New Deal, which pitted “trust-busters against regulators. In banking, the trust-busters won the day with the Glass-Steagall Act of 1933, which divorced commercial banking from investment banking and …

LONDON: How real is the danger of inflation for the world economy? Opinion on this matter is divided between conservative economists and official bodies like the IMF and OECD. The IMF and OECD project very low inflation rates over the next few years. But former US Federal Reserve Chairman Alan Greenspan warns of inflationary dangers. …

LONDON: From next year, on swearing allegiance to the Queen, all members of Britain’s House of Lords – and I am one of them – will be required to sign a written commitment to honesty and integrity. Unexceptionable principles, one might say. But, until recently, it was assumed that persons appointed to advise the sovereign …

LONDON: The economic downturn has produced an explosion of popular anger against bankers’ “greed and their “obscene bonuses. This has accompanied a wider critique of “growthmanship – the pursuit of economic growth or the accumulation of wealth at all costs, regardless of the damage it may do to the earth’s environment or to shared values. …

LONDON: The economist John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to “bring to an issue the deep divergences of opinion between fellow economists which have for the time being almost destroyed the practical influence of economic theory. Seventy years later, heavyweight economists are still at each other’s throats, in …

LONDON: Have stimulus packages brought the world’s traumatized economies back to life? Or have they set the scene for inflation and big future debt burdens? The answer is that they may have done both. The key question now concerns the order in which these outcomes occur. The theory behind the massive economic stimulus efforts that …

LONDON: A year ago, tiny Georgia tried to regain control over its breakaway enclave of South Ossetia. The Russians quickly expelled the Georgian army, to almost universal opprobrium from the West. South Ossetia, together with Abkhazia (combined population 300,000), promptly declared their “independence, creating two new fictional sovereignties, and acquiring in the process all the …

LONDON: Mainstream economics subscribes to the theory that markets “clear continuously. The theory’s big idea is that if wages and prices are completely flexible, resources will be fully employed, so that any shock to the system will result in instantaneous adjustment of wages and prices to the new situation. This system-wide responsiveness depends on economic …

LONDON: Home to one-sixth of the world’s people, but contributing only one-fortieth of world GDP, Africa is the most conspicuous victim of the global recession. After a half-decade of 5% growth, the continent’s growth rate is expected to halve in 2009. Some countries, like Angola, are contracting. Elsewhere, the crisis has swept away the benefits …

LONDON: Thirty years ago this month, Margaret Thatcher came to power. Although precipitated by local conditions, the Thatcher (or more broadly the Thatcher-Reagan) revolution became an instantly recognizable global brand for a set of ideas that inspired policies to free markets from government interference. Three decades later, the world is in a slump, and many …

LONDON: All epoch-defining events are the result of conjunctures – the correlation of normally unconnected events that jolt humanity out of a rut. Such conjunctures create what the author Nassim Nicholas Taleb calls “Black Swans – unpredictable events with a vast impact. A small number of Black Swans, Taleb believes, “explain almost everything in our …

LONDON: Earlier this month, the International Criminal Court (ICC) upheld the request of the court’s chief prosecutor to issue an arrest warrant for Omar Al-Beshir, the President of Sudan, charging him with war crimes and crimes against humanity. Al-Beshir responded by expelling foreign aid agencies looking after the refugee camps in Darfur. This is the …

LONDON: “Enrich yourselves, China’s Deng Xiaoping told his fellow countrymen when he started dismantling Mao Zedong’s failed socialist model. In fact, elites everywhere have always lived by this injunction, and ordinary people have not minded very much, provided that the elites fulfill their part of the bargain: protect the country against its enemies and improve …

LONDON: Testifying recently before a United States congressional committee, former Federal Reserve Chairman Alan Greenspan said that the recent financial meltdown had shattered his “intellectual structure. I am keen to understand what he meant. Since I have had no opportunity to ask him, I have to rely on his memoirs, The Age of Turbulence , …

LONDON: Economics, it seems, has very little to tell us about the current economic crisis. Indeed, no less a figure than former United States Federal Reserve Chairman Alan Greenspan recently confessed that his entire “intellectual edifice had been “demolished by recent events. Scratch around the rubble, however, and one can come up with useful fragments. …

LONDON: After World War I, H.G. Wells wrote that a race was on between morality and destruction. Humanity had to abandon its warlike ways, Wells said, or technology would decimate it. Economic writing, however, conveyed a completely different world. Here technology was deservedly king. Prometheus was a benevolent monarch who scattered the fruits of progress …

LONDON: The beginning of October marked the seventh anniversary of the beginning of the American-led bombardment of Afghanistan. Seven years later, the Taliban are still fighting. Some 50 insurgents died recently in an assault on Lashkar gar, the capital of Helmand province. Osama bin Laden is nowhere to be found. Has the time come for …

LONDON: The looming bankruptcy of Lehman Brothers, and the forced sale of Merrill Lynch, two of the greatest names in finance, mark the end of an era. But what will come next? Cycles of economic fashion are as old as business cycles, and are usually caused by deep business disturbances. “Liberal cycles are followed by …

LONDON: Privacy has become a big issue in contemporary jurisprudence. The “right to privacy is enshrined in the United Nations Declaration of Human Rights, and guaranteed by Article 8 of the European Convention on Human Rights. But Article 8 is balanced by Article 10, which guarantees “free expression of opinion. So what right has priority …

Would it be a great disaster if Iran had nuclear weapons? As a habitual contrarian, I pose the question because almost everyone seems to believe that it would, and that it must be prevented at all costs. But is that true? John Bolton, the former United States Ambassador to the United Nations, said in April …

Senator John McCain, the Republican presidential candidate, has been calling for the creation of a “League of Democracies. This new international group would possess a formidable military capacity, based partly on NATO and partly on a “new quadrilateral security partnership in the Pacific between Australia, India, Japan, and the US. Neither Russia nor China, of …

It was only to be expected that former US Vice President Al Gore would give this month’s Burmese cyclone an apocalyptic twist. “Last year, he said, “a catastrophic storm hit Bangladesh. The year before, the strongest cyclone in more than 50 years hit China. …We’re seeing the consequences that scientists have long predicted might be …

Kosovo’s recent unilateral declaration of independence brought back memories. I publicly opposed NATO’s attack on Serbia – carried out in the name of protecting the Kosovars from Serb atrocities – in March 1999. At that time, I was a member of the Opposition Front Bench – or Shadow Government – in Britain’s House of Lords. …